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Deal Makers Return to the Table in Asia with Heightened Focus on Risk Mitigation

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2010-09-14 10:08
SINGAPORE and HONG KONG, Sept. 14 /PRNewswire-Asia/ — Investors in Asia are returning to the merger and acquisition table with a renewed interest in risk mitigation tools such as Warranty & Indemnity Insurance (W&I Insurance), according to a report by Marsh, the world’s leading risk advisor and insurance broker.

The latest edition of the Transactional Risk Update: Half-Year 2010, a regular publication from Marsh’s Private Equity and Mergers & Acquisitions (PEMA) Services, features a special focus on M&A trends in the Asia Pacific region, including a discussion on insurance protection.

“As mid-market M&A in Asia continues to be active, and large, leveraged deals begin to show signs of a revival, both buyers and sellers are looking to protect their interests more vigorously,” said Josh Roach, Asia Leader for Marsh’s PEMA Services.

“The lessons from the global financial crisis remain fresh in investors’ minds as buyers and sellers are looking for insurance products to better allocate deal risk, especially for cross-border transactions where they may be investing in less familiar territories or selling to a foreign buyer. W&I Insurance — a relatively new insurance product in Asia but more common in the US and Europe — is gaining popularity as the preferred tool to protect their interests.”

“W&I Insurance is now available domestically in China; a clear sign that the M&A market there continues rapidly to become more sophisticated, with demand for risk transfer solutions and services on the rise.”

According to the latest Thomson Reuters data from the first-half of 2010, Asian M&A deal values increased significantly compared to the same period last year. Hong Kong alone saw an increase of 275% in completed M&A deal values. The data also indicated a significant jump among private equity firms willing to commit capital after staying on the sidelines during the recent economic turmoil. (Source: Thomson Reuters)

During share and asset sales it is common for the seller to provide warranties to the buyer on a broad range of matters about the target, such as title to shares, property, employment, tax, intellectual property and other commercial matters. W&I Insurance (also know as Reps and Warranties Insurance) is an insurance solution which provides recourse against breaches of the warranties and indemnities being given by the seller.

“In Asia, we have seen more queries regarding W&I Insurance in the first half of 2010 than in all of 2008 and 2009 combined. This is a clear indication that while dealmakers are hungry, they are adopting a more considered and risk-aware approach than during the boom years of 2006 and 2007,” said Mr Roach.

“As economic power and M&A activity continues to shift to Asia, the demand for innovative and sophisticated services will only grow. Marsh’s PEMA Services is well-placed to help clients close deals with higher degrees of comfort in the region.”

To access the report, please click here: http://www.marsh-asia.com/brochure.html

About Marsh’s Private Equity and M&A Services

Marsh’s Private Equity and M&A Services is a dedicated team of specialists focused on the risk and insurance issues that influence negotiations and the long-term financial success of a transaction. Established for over 20 years, our global practice of over 130 professionals has advised on over 10,000 transactions around the world. These transactions include mergers & acquisitions, divestments, infrastructure investments, public to private partnerships (PPPs), private finance initiatives (PFIs), privatizations and structured finance transactions.

About Marsh

Marsh has over 24,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with over 50,000 employees worldwide and annual revenue of US$10 billion. MMC also is the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. MMC’s website address is http://www.mmc.com . Marsh’s Web site is http://www.marsh.com .

Contacts:

William Sargent
Tel: +65-8139-7400
Email: william.sargent@marsh.com

SOURCE Marsh

Written by asiafreshnews

September 20, 2010 at 2:28 pm

Posted in Business & Finance